MGT-610

SUBJECTIVE MID-TERM
By: USMAN ATTARI
0321-6265346
All questions from Past Papers & Current Exam May, 2012

What traits are the valuable parts of person’s morally good

behavior?
According to Aristotle, moral virtues enable humans to act in
accordance with their specific purpose (which he held to be
reasoning).Other philosophers, such as Aquinas, have come up
with different lists of virtues.

In perfect compaction the demand curve is always

downward slopping. Why?
Under the assumption of perfect competition, supply is
determined by marginal cost. Firms will produce additional output
as long as the cost of producing an extra unit of output is less
than the price they will receive.
The demand curve is almost always represented as downward-
sloping, meaning that as price decreases, consumers will buy
more of the good.

What are the two ideological camps in free trade theories?

Explain in detail……5 marks
In general, two important ideological camps, the individualistic
and communitarian viewpoints, characterize modern societies.
Individualistic societies promote a limited government whose
primary purpose is to protect property, contract rights, and open
markets. Communitarian societies, in contrast, define the needs
of the community first and then define the rights and duties of
community membership to ensure that those needs are met.
What is monopolistic and oligopolistic competition? Explain
the main points of difference? 
In a monopoly, two of the seven conditions are absent: there is
only one seller, and other sellers cannot enter the market. As the
case of Alcoa exemplifies, such markets are far from the perfectly
competitive model.
Most industries are not entirely monopolistic; in fact, most are
dominated by a few large firms. These markets lie somewhere in
between the monopoly and the perfectly competitive free market;
the most important type of these imperfectly competitive markets
is the oligopoly.

Define Law of Nature? (3)

“A state of perfect freedom to order their actions and dispose of
their possessions and persons as they think fit, within the bounds
of the law of nature, without asking leave, or depending upon the
will of any other man. A state also of equality, wherein all the
power and jurisdiction is reciprocal, no one having more than
another... without subordination or subjection [to another].... But...
the state of nature has a law of nature to govern it, which obliges
everyone: and reason, which is that law, teaches all mankind,
who will but consult it, that being all equal and independent, no
one ought to harm another in his life, health, liberty, or
possessions.”

Describe Social Darwinism? (3)

Social Darwinism is a belief, popular in the late Victorian era in
England, America, and elsewhere, which states that the
strongest or fittest should survive and flourish in society, while
the weak and unfit should be allowed to die. The theory was
chiefly expounded by Herbert Spencer, whose ethical
philosophies always held an elitist view and received a boost
from the application of Darwinian ideas such as adaptation and
natural selection.
Define theory of Absolute Advantage. Compare it with
Comparative advantage? (5)
In 1776 Adam Smith asserted that the wealth of a nation
consisted of the goods and services available to its citizens. His
theory of absolute advantage holds that a country can maximize
its own economic well being by specializing in the production of
those goods and services that it can produce more efficiently
than any other nation and enhance global efficiency through its
participation in (unrestricted) free trade.
In 1817 David Ricardo reasoned that there would still be gains
from trade if a country specialized in the production of those
things it can produce most efficiently, even if other countries can
produce those same things even more efficiently. Put another
way, Ricardo’s theory of comparative advantage holds that a
country can maximize its own economic wellbeing by specializing
in the production of those goods and services it can produce
relatively efficiently and enhance global efficiency through its
participation in (unrestricted) free trade

A question related to Limitation of the Locke. (5)

John Locke: The Limitations of Government Power
An important aspect of all social contract arguments is the
placement of limits, both on the power of the government and on
the level of state tolerance. John Locke wrote of the limitations of
government power in the Second Treatise of Government, and of
the limits of toleration in his Letter Concerning Toleration. Locke
claims that there is a moral limitation on the on the state as well
as a moral limitation on tolerance.
Man's main purpose for forming commonwealths, according to
Locke, is in order to protect property. All laws and regulations of
the commonwealth are based on the main principle of preserving
property. The state is thus limited in that it cannot take a man's
property away from him. If he has consented to the contract
necessary to live in the state, his property is thusly protected by
laws. The only way a man's property can be taken away is if he
breaks his end of the contract and is therefore no longer under
contract.
Features of market economy?
Free choice: individuals have purchase options.
Free enterprise: companies can decide what to produce and
which markets to compete in.
Price flexibility: prices rise/fall reflecting supply and demand.
Focus on China
China’s theme is “Socialism with Chinese characteristics,” and
the nation has undergone great economic reform over the past
two decades.
 Early Years
 Challenges Ahead

Define Principal of diminishing marginal utility with example

A law of economics stating that as a person increases
consumption of a product - while keeping consumption of other
products constant - there is a decline in the marginal utility that
person derives from consuming each additional unit of that
product.

Let me give you example, if you had no shoes and someone

gave you only one shoe, you would receive some utility. You can
now hop through the sticker patch. But a second shoe that
completes the pair might actually give you more utility than the
first shoe, because you are clumsy and you keep falling down
with only one shoe. But with two shoes, you can run and hop and
not worry about stickers and stones. So the second shoe actually
has increasing marginal utility.

Now going on, a second pair of shoes doesn't add as much utility
as the first pair; though it is still better to have two pair of shoes
than just one. So total utility has increased with the second pair
of shoes, but marginal utility has diminished with the additional
shoes.

Describe two neutral rights of free market economy  

John Locke (1632-1704), an English political philosopher, is
generally credited with developing the idea that human beings
have a "natural right" to liberty and a "natural right" to private
property. Locke argued that if there were no governments,
human beings would find themselves in a state of nature. In this
state of nature, each man would be the political equal of all
others and would be perfectly free of any constraints other than
the law of nature—that is, the moral principles that God gave to
humanity and that each man can discover by the use of his own
God-given reason.

Critics by Adam Smith of utilitarianism

Smith's utilitarian argument is most commonly criticized for
making what some call unrealistic arguments.
 First, Smith assumes that no one seller can control the price
of a good. Though this may have been true at one time,
today many industries are monopolized to some extent.
 Second, Smith assumes that the manufacturer will pay for all
the resources used to produce a product, but when a
manufacturer uses water and pollutes it without cleaning it,
for example, someone else must pay to do so.
 Third, Smith assumes that humans are motivated only by a
natural, self-interested desire for profit. This, say his critics,
is clearly false. Many humans are concerned for others and
act to help others, constraining their own self-interest.
 Market systems, say Smith's critics, make humans selfish
and make us think that the profit motive is natural.

Describe main difference between Monopoly, and oligopoly?

(5)
Oligopoly and monopoly have some similarities, both tend to be
relatively large and possess significant market control, but also
have a few important differences; oligopoly market has more than
one firm. The dividing line between oligopoly and monopoly,
however, can be blurred due to the closeness of substitutes and
the inclination of oligopoly firms to collude.
Oligopoly is a market structure containing a small number of
relatively large firms that often produce slightly differentiated
output and with significant barriers to entry. Monopoly is a market
structure containing a single firm that produces a good with no
close substitutes and with significant barriers to entry. While it
might seem as though the difference between oligopoly and
monopoly is clear cut, such is not always the case.

Economic free index

The Economic Freedom Index approximates the extent to which
a government intervenes in the areas of free choice, free
enterprise, and market-driven prices for reasons that go beyond
basic national needs.

Locke four major weakness criticize (5 Marks)

Locke's critics focus on four weaknesses in his argument:
The assumption that individuals have natural rights: This
assumption is unproven and assumes that the rights to liberty
and property should take precedence over all other rights. If
humans do not have the overriding rights to liberty and property,
then the fact that free markets would preserve the rights does not
mean a great deal.
The conflict between natural (negative) rights and positive rights:
Why should negative rights such as liberty take precedence over
positive rights? Critics argue, in fact, that we have no reason to
believe that the rights to liberty and property are overriding.
The conflict between natural rights and justice: Free markets
create unjust inequalities, and people who have no property or
who are unable to work will not be able to live. As a result,
without government intervention, the gap between the richest and
poorest will widen until large disparities of wealth emerge. Unless
government intervenes to adjust the distribution of property that
results from free markets, large groups of citizens will remain at a
subsistence level while others grow ever wealthier.
Individualistic assumptions and their conflicts with the ethics of
caring: Locke assumes that people are individuals first,
independent of their communities. But humans are born
dependent on others, and without caring relationships, no human
could survive. The degree of liberty a person has depends on
what the person can do. The less a person can do, the less he is
free to do. But a person's abilities depend on what he learns from
those who care for him as well as on what others care to help
him to do or allow him to do.

Presently Countries are classified as Free, Mostly Free,

Mostly Unfree and repressed. Which are the determining
factors of this classification? (Marks 3)
Determining factors include: trade policy, the fiscal burden of the
government, the extent and nature of government intervention in
the economy, monetary policy, capital flows and investment,
banking and financial activities, wage and price levels, property
rights, other government regulation, and informal market
activities. Over time, more and more countries have moved
toward greater economic freedom. Countries ranking highest on
this index tend to enjoy both the highest standards of living as
well as the greatest degree of political freedom.
Sometimes Care and Justice has conflict, give an example
and suggest the guidelines to avoid this conflicts. (Marks 5)
In many personal and family a relationship, caring play a large
role, and rights quite a small one (do you feed your children
because they have a right to be fed?). In the wider society, it is
likely that some people will always fall outside anyone's circle of
caring (as I asked in a previous article, what about the other
porcupines that might be wandering homeless out there?).
So we need the remendously important notions of justice and of
human rights, even if these can sound abstract and impersonal.
And we need to recognize that rights to your own property are
not the only rights: there are rights to food, to shelter, to be
treated with dignity. Large institutions, including governments,
can't really care for people in the same way that you might care
for people close to you, but they can try to see that everyone's
rights are respected.
So perhaps caring is for personal life and justice for public life?
Then, if we take what I called in Issue 51 the Ofsted view of the
relationship between PSHE and citizenship, we might say that
PSHE lessons should look at caring, and citizenship lessons at
justice and rights. But life doesn't divide into such neat
compartments.
Even when we care for people we can be unfair to them and not
respect their rights as individuals. And it sometimes makes sense
to criticize large institutions for policies that look right in principle
but are uncaring in their effects.
Since most people's values don't come in separate sets labeled
'personal' and 'public', it would be a pity if the organization of the
curriculum encouraged an either/or view about justice and caring
when what we would be teaching is that both are always
relevant.
Is Free Competitive markets has bad impact on ethics of
care? Discuss briefly. (Marks 5)
Free competitive markets may have a pernicious effect on
people's moral character. The competitive pressures that are
present in perfectly competitive markets can lead people to
attend constantly to economic efficiency. Producers are
constantly pressured to reduce their costs and increase their
profit margins. Finally, and most important, we should note that
the three values of capitalist justice, utility, and negative rights
are produced by free markets only if they embody the seven
conditions that define perfect competition. If one or more of these
conditions are not present in a given real market, then the claim
can no longer be made that these three values are present.

Demand curve download slopping in perfect competition.

A perfectly competitive firm produces a minuscule proportion of
the total industry output. Thus, although the market demand
curve is downward sloping, the demand curve from the
perspective of the individual firm is perfectly elastic (horizontal). A
perfectly competitive firm can sell as much as it wants at an
unchanged price. A perfectly competitive firm has no market
power, and is said to be a price taker.

Arguments supporting ethics of care?

The ethics of care is seen to have a distinctive import because it
is well equipped to understand cultural and social ties; thus, it
gives priority to "positive involvement with others and fosters
social bonds and cooperation" (157). But this remark hardly
amounts to an argument for care ethics.
Morality is a principle to follow or cultivation to certain
dispositions and traits. Support your answer with logical
arguments.
However, there is another understanding of morality which
should not be forgotten. This is the sense of morality in which
morality is linked with certain virtues, excellences, or flourishing
ways of living. In this sense, morality is not primarily concerned
with rules and principles, but with the cultivation of certain
dispositions or traits of character. This view has been expressed
in this way: ‘the moral law ... has to be expressed in the form, “be
this”, not in the form, “do this” ... the true moral law says “hate
not”, instead of “kill not”...... the only mode of stating the moral
law must be a rule of character.’ This, I believe, is quite close to
Marx’s views.

Elaborate Formulation of kant's categorical Imperative

(5Marks)
Kant’s first formulation of the categorical imperative is as follows:
“I ought never to act except in such a way that I can also will that
my maxim should become a universal law.” A maxim for Kant is
the reason a person in a certain situation has for doing what he
or she plans to do. A maxim whoud “become a universal law” if
every person in a similar situation chose to do the same thing for
the same reason. Kant’s first version of the categorical
imperative, then come down to the following principle:
“An action is morally right for a person in a certain situation if,
and only if, the person's reason for carrying out the action is a
reason that he or she would be willing to have every person act
on, in any similar situation.”

Define egalitarian view (3Marks)

Egalitarians hold that there are no relevant differences among
people that can justify unequal treatment. According to the
egalitarian, all benefits and burdens should be distributed
according to the following formula:
“Every person should be given exactly equal shares of a society's
or a group's benefits and burdens.”

Communitarian system and individual system (3Marks)

Communitarian systems use a command system, in which a
single authority decides what to produce, who will produce it, and
who will get it. Free market systems are characteristic of
individualistic societies.
Free market systems are characteristic of individualistic societies.
Incorporating ideas from thinkers like John Locke and Adam
Smith, they allow individual firms to make their own decisions
about what to produce and how to do so.

Differentiate the concept of justice and Virtue (3Marks)

When we speak of justice as a virtue, we are usually referring to
a trait of individuals, even if we conceive the justice of individuals
as having some (grounding) reference to social justice. But
Rawls and others regard justice as “the first virtue of social
institutions” (1971, p. 3), so “justice as a virtue” is actually
ambiguous as between individual and social applications. This
essay will reflect and explore that ambiguity, though the principal
focus will understandably be on the justice of individuals.

How you will perform moral ethics in specific circumstances

(3Marks)
Circumstances that leave a person uncertain (but not unsure)
about what he or she is doing;
Circumstances that make it difficult (but not impossible) for the
person to avoid doing it;
Circumstances that minimize (but do not remove) a person's
involvement in an act
Major problems with utilitarian (3Marks)
Though utilitarianism offers a superficially clear-cut method of
calculating the morality of actions, it relies upon accurate
measurement, and this can be problematic. There are five major
problems with the utilitarian reliance on measurement:
1. Comparative measures of the values things have for
different people cannot be made-we cannot get into each
others' skins to measure the pleasure or pain caused.
2. Some benefits and costs are impossible to measure. How
much is a human life worth, for example?
3. The potential benefits and costs of an action cannot always
be reliably predicted, so they are also not adequately
measurable.
4. It is unclear exactly what counts as a benefit or a cost.
People see these things in different ways.
5. Utilitarian measurement implies that all goods can be traded
for equivalents of each other. However, not everything has a
monetary equivalent.

Explain social science?

The social sciences—such as anthropology, sociology, and
psychology—also study morality, but do so in a way that is quite
different from the approach to morality that is characteristic of
ethics.

Define mixed economy and its elements      5

Economic system in which land, factories, and other economic
resources are more equally split between private and
government ownership. Government controls economic sectors
important to national security and long-term stability. Generous
welfare system supports unemployed and provides health care.
There are three elements which are
 1. Origins of the Mixed Economy
2. Decline of Mixed Economies
3. Market Economy

Rawl's theory of justice ideas          3

John Rawls' theory of justice as fairness is an attempt to bring
many of these disparate ideas together in a comprehensive way.
According to his theory, the distribution of benefits and burdens
in a society is just if:
1. Each person has an equal right to the most extensive basic
liberties compatible with equal liberties for all (the principle of
equal liberty); and
2. Social and economic inequalities are arranged so that they
are both:
a. To the greatest benefit of the least advantaged (the
difference principle), and
b. Attached to offices and positions open fairly and equally to
all (the principle of equal opportunity).

What consideration you will need about goods and its

benefits, which are presented in traditions occasions?
To determine what the moral thing to do on any particular
occasion might be, there are three considerations to follow:
1. You must determine what alternative actions are
available.
2. You must estimate the direct and indirect costs and
benefits the action would produce for all involved in the
foreseeable future.
3. You must choose the alternative that produces the
greatest sum total of utility.

Aquinas critics on Aristotle 3 Marks

According to Aristotle, moral virtues enable humans to act in
accordance with their specific purpose (which he held to be
reasoning). Other philosophers, such as Aquinas, have come up
with different lists of virtues.

Is it true that competitive markets are ethical? I forgot the

exact question 5 Marks
Yes….! In a perfectly competitive market ethical considerations
are widely accepted as part of a broader cultural sensitivity that
requires organizations to work towards perfection and morality.
Unfortunately, this is not always the case. In most of the cases,
unethical business conduct is closely associated to corporate or
individual goals of the organizational members.

Critics on Kant 3 Marks

Despite the attractiveness of Kant's theory, critics have argued
that, like utilitarianism, it has its limitations and inadequacies.
1. A first problem that critics have traditionally pointed out
is that Kant's theory is not precise enough to always be
useful.
2. Second, some critics claim that although we might be
able to agree on the kinds of interests that have the status
of moral rights, there is substantial disagreement
concerning what the limits of each of these rights are and
concerning how each of these rights should be balanced
against other conflicting rights.
3. A third group of criticisms that have been made of
Kant's theory is that there are counterexamples that show
the theory sometimes goes wrong. Most counterexamples
to Kant's theory focus on the criteria of universalizability
and reversibility.

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